Federal Register / Vol. 72, No. 36 / Friday, February 23, 2007 / Notices 8227 

24 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

by the dealer remained subject to all 

other NASD rules and the federal 

securities laws, including the anti-fraud 

provisions. 

The MSRB believes that the approach 

NASD has taken with respect to 

investment companies is appropriate as 

well with respect to 529 plans and other 

municipal fund securities programs and 

has provided guidance to this effect in 

the proposed interpretive notice. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

As the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

A. By order approve such proposed 

rule change, or 

B. institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–MSRB–2006–09 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–MSRB–2006–09. This file 

number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for inspection and copying in 

the Commission’s Public Reference 

Room. Copies of such filing also will be 

available for inspection and copying at 

the MSRB’s offices. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–MSRB–

2006–09 and should be submitted on or 

before March 16, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.24

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–3091 Filed 2–22–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55300; File No. SR–

NASDAQ–2007–002] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Order Granting Accelerated 

Approval of Proposed Rule Change, as 

Modified by Amendment No. 1 Thereto, 

To Trade the Shares of Certain 

Exchange-Traded Funds Based on 

Fixed Income Portfolios Pursuant to 

Unlisted Trading Privileges 

February 15, 2007. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on January 

29, 2007, The NASDAQ Stock Market 

LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been substantially prepared by the 

Exchange. On February 13, 2007, 

Nasdaq filed Amendment No. 1 to the 

proposed rule change. This Order 

provides notice of the proposed rule 

change, as modified by Amendment No. 

1, and approves the proposed rule 

change, as amended, on an accelerated 

basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Nasdaq is proposing to trade shares 

(the ‘‘Shares’’) of: (1) The iShares 

Lehman TIPS Bond Fund; (2) the 

iShares Lehman Aggregate Bond Fund; 

(3) the iShares iBoxx $ Investment 

Grade Corporate Bond Fund; (4) the 

iShares Lehman 20+ Year Treasury 

Bond Fund; (5) the iShares 7–10 Year 

Treasury Bond Fund; (6) the iShares 

Lehman 1–3 Year Treasury Bond Fund; 

(7) the iShares Lehman Short Treasury 

Bond Fund; (8) the iShares Lehman 3–

7 Year Treasury Bond Fund; (9) the 

iShares Lehman 10–20 Year Treasury 

Bond Fund; (10) the iShares Lehman 1–

3 Year Credit Bond Fund; (11) the 

iShares Lehman Intermediate Credit 

Bond Fund; (12) the iShares Lehman 

Credit Bond Fund; (13) the iShares 

Lehman Intermediate Government/ 

Credit Bond Fund; and (14) the iShares 

Lehman Government/Credit Bond Fund 

(collectively, the ‘‘Funds’’) pursuant to 

unlisted trading privileges (‘‘UTP’’). The 

text of the proposed rule change is 

available at Nasdaq, the Commission’s 

Public Reference Room, and 

nasdaq.complinet.com. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item III below. The 

Exchange has prepared summaries, set 

forth in Sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Nasdaq is proposing to trade pursuant 

to UTP the Shares of the Funds, which 

are exchange-traded funds (‘‘ETFs’’) that 

invest in fixed income securities. 

Nasdaq represents that its current 

generic listing standards for ETFs do not 

extend to ETFs that invest in fixed 

income securities. The systems operated 

by Nasdaq and its affiliates currently 

trade Shares of the Funds on an overthe-counter basis as facilities of NASD. 


cprice-sewell on PROD1PC61 with NOTICES
8228 Federal Register / Vol. 72, No. 36 / Friday, February 23, 2007 / Notices 

3E-mail from John Yetter, Deputy General 

Counsel, Nasdaq, to Edward Cho, Special Counsel, 

Division of Market Regulation, Commission, on 

February 8, 2007 (correcting the name of the 

Lehman Brothers U.S. TIPS Index). 

4See Securities Exchange Act Release No. 48881 

(December 4, 2003), 68 FR 69739 (December 15, 

2003) (SR–NYSE–2003–39). 

5See Securities Exchange Act Release No. 48534 

(September 24, 2003), 68 FR 56353 (September 30, 

2003) (SR–Amex–2003–75). 

6See Securities Exchange Act Release No. 46252 

(July 24, 2002), 67 FR 49715 (July 31, 2002) (SR–

Amex–2001–35). 

7See id. 

8See id. 

9See id. 

10See Securities Exchange Act Release No. 54916 

(December 11, 2006), 71 FR 76008 (December 19, 

2006) (SR–NYSE–2006–70). 

11See id. 

12See id. 

13See id. 

The iShares Lehman TIPS Bond Fund 

seeks investment results that correspond 

generally to the price and yield 

performance, before fees and expenses, 

of the inflation-protected sector of the 

U.S. Treasury market, as defined by the 

Lehman Brothers U.S. TIPS Index.3 The 

Lehman Brothers U.S. TIPS Index 

measures the performance of inflationprotected public obligations of the U.S. 

Treasury, commonly known as ‘‘TIPS.’’

The Commission previously approved 

the original listing and trading of shares 

of this Fund on the New York Stock 

Exchange, Inc. (‘‘NYSE’’).4

The iShares Lehman Aggregate Bond 

Fund seeks investment results that 

correspond generally to the price and 

yield performance, before fees and 

expenses, of the total U.S. investmentgrade bond market, as defined by the 

Lehman Brothers U.S. Aggregate Index. 

The Lehman Brothers U.S. Aggregate 

Index measures the performance of the 

total U.S. investment-grade bond 

market, which includes investmentgrade U.S. Treasury bonds, governmentrelated bonds, investment-grade 

corporate bonds, mortgage pass-through 

securities, commercial mortgage-backed 

securities, and asset-backed securities 

that are publicly offered for sale in the 

United States. The Commission 

previously approved the original listing 

and trading of shares of this Fund on the 

American Stock Exchange LLC 

(‘‘Amex’’).5

The iShares iBoxx $ Investment Grade 

Corporate Bond Fund (formerly the 

iShares GS $ InvesTop Corporate Bond 

Fund) seeks investment results that 

correspond generally to the price and 

yield performance, before fees and 

expenses, of a segment of the U.S. 

investment-grade corporate bond 

market, as defined by the iBoxx $ Liquid 

Investment Grade Index (formerly the 

GS $ InvesTop Index). The iBoxx $ 

Liquid Investment Grade Index 

measures the performance of a fixed 

number of highly liquid, investmentgrade corporate bonds. The Commission 

previously approved the original listing 

and trading of shares of this Fund on 

Amex.6

The iShares Lehman 20+ Year 

Treasury Bond Fund seeks investment 

results that correspond generally to the 

price and yield performance, before fees 

and expenses, of the long-term sector of 

the U.S. Treasury market, as defined by 

the Lehman Brothers 20+ Year U.S. 

Treasury Index. The Lehman Brothers 

20+ Year Treasury Index measures the 

performance of public obligations of the 

U.S. Treasury that have a remaining 

maturity of 20 or more years. The 

Commission previously approved the 

original listing and trading of shares of 

this Fund on Amex.7

The iShares Lehman 7–10 Year 

Treasury Bond Fund seeks investment 

results that correspond generally to the 

price and yield performance, before fees 

and expenses, of the intermediate-term 

sector of the U.S. Treasury market, as 

defined by the Lehman Brothers 7–10 

Year U.S. Treasury Index. The Lehman 

Brothers 7–10 Year Treasury Index 

measures the performance of public 

obligations of the U.S. Treasury that 

have a remaining maturity of greater 

than or equal to seven years and less 

than ten years. The Commission 

previously approved the original listing 

and trading of shares of this Fund on 

Amex.8

The iShares Lehman 1–3 Year 

Treasury Bond Fund seeks investment 

results that correspond generally to the 

price and yield performance, before fees 

and expenses, of the short-term sector of 

the U.S. Treasury market, as defined by 

the Lehman Brothers 1–3 Year U.S. 

Treasury Index. The Lehman Brothers 

1–3 Year U.S. Treasury Index measures 

the performance of public obligations of 

the U.S. Treasury that have a remaining 

maturity of greater than or equal to one 

year and less than three years. The 

Commission previously approved the 

original listing and trading of shares of 

this Fund on Amex.9

The iShares Lehman Short Treasury 

Bond Fund seeks investment results that 

correspond generally to the price and 

yield performance, before fees and 

expenses, of the short-term sector of the 

U.S. Treasury market, as defined by the 

Lehman Brothers Short U.S. Treasury 

Index. The Lehman Brothers Short U.S. 

Treasury Index measures the 

performance of public obligations of the 

U.S. Treasury that have a remaining 

maturity of between one and 12 months. 

The Commission previously approved 

the original listing and trading of shares 

of this Fund on NYSE.10

The iShares Lehman 3–7 Year 

Treasury Bond Fund seeks investment 

results that correspond generally to the 

price and yield performance, before fees 

and expenses, of the intermediate-term 

sector of the U.S. Treasury market, as 

defined by the Lehman Brothers 3–7 

Year U.S. Treasury Index. The Lehman 

Brothers 3–7 Year U.S. Treasury Index 

measures the performance of public 

obligations of the U.S. Treasury that 

have a remaining maturity of greater 

than or equal to three years and less 

than seven years. The Commission 

previously approved the original listing 

and trading of shares of this Fund on 

NYSE.11

The iShares Lehman 10–20 Year 

Treasury Bond Fund seeks investment 

results that correspond generally to the 

price and yield performance, before fees 

and expenses, of the long-term sector of 

the U.S. Treasury market, as defined by 

the Lehman Brothers 10–20 Year U.S. 

Treasury Index. The Lehman Brothers 

10–20 Year U.S. Treasury Index 

measures the performance of public 

obligations of the U.S. Treasury that 

have a remaining maturity of greater 

than or equal to ten years and less than 

20 years. The Commission previously 

approved the original listing and trading 

of shares of this Fund on NYSE.12

The iShares Lehman 1–3 Year Credit 

Bond Fund seeks investment results that 

correspond generally to the price and 

yield performance, before fees and 

expenses, of the investment-grade credit 

sector of the U.S. bond market, as 

defined by the Lehman Brothers 1–3 

Year U.S. Credit Index. The Lehman 

Brothers 1–3 Year U.S. Credit Index 

measures the performance of 

investment-grade corporate debt and 

sovereign, supranational, local 

authority, and non-U.S. agency bonds 

that have a remaining maturity of 

greater than or equal to one year and 

less than three years. The Commission 

previously approved the original listing 

and trading of shares of this Fund on 

NYSE.13

The iShares Lehman Intermediate 

Credit Bond Fund seeks investment 

results that correspond generally to the 

price and yield performance, before fees 

and expenses, of the investment-grade 

credit sector of the U.S. bond market, as 

defined by the Lehman Brothers 

Intermediate U.S. Credit Index. The 


cprice-sewell on PROD1PC61 with NOTICES
Federal Register / Vol. 72, No. 36 / Friday, February 23, 2007 / Notices 8229 

14See id. 

15See id. 

16See id. 

17See id. 

18See supra notes 4, 5, 6, and 10. 

19 Deposit Securities are the designated portfolio 

of securities that correspond generally to the price 

and yield performance of the relevant Fund’s Index 

to be deposited in-kind for the purchase of blocks 

of 50,000 Shares, each such block referred to as a 

‘‘Creation Unit Aggregation.’’

20The Balancing Amount is an amount equal to 

the difference between the net asset value (‘‘NAV’’) 

of the Fund and the total aggregate market value, 

per Creation Unit Aggregation, of the Deposit 

Securities. The deposit of the requisite Deposit 

Securities and the Balancing Amount are 

collectively referred to as the ‘‘Portfolio Deposit,’’

which represents the minimum initial and 

subsequent investment amount for a Creation Unit 

Aggregation. 

21See Securities Exchange Act Release No. 55269 

(February 9, 2007), 72 FR 7490 (February 15, 2007) 

(SR–NASDAQ–2006–050). 

22Nasdaq relies on the listing market to monitor 

dissemination of the IOPV during Nasdaq’s regular 

market hours (9:30 a.m. to 4:15 p.m. ET). Currently, 

updated Index values are not calculated during 

Nasdaq’s post-market session; however, if in the 

future such values are calculated, Nasdaq would 

not trade the Fund Shares unless such official Index 

values were widely disseminated. 

Lehman Brothers Intermediate U.S. 

Credit Index measures the performance 

of investment-grade corporate debt and 

sovereign, supranational, local 

authority, and non-U.S. agency bonds 

that have a remaining maturity of 

greater than or equal to one year and 

less than ten years. The Commission 

previously approved the original listing 

and trading of shares of this Fund on 

NYSE.14

The iShares Lehman Credit Bond 

Fund seeks investment results that 

correspond generally to the price and 

yield performance, before fees and 

expenses, of the investment-grade credit 

sector of the U.S. bond market, as 

defined by the Lehman Brothers U.S. 

Credit Index. The Lehman Brothers U.S. 

Credit Index measures the performance 

of investment-grade corporate debt and 

sovereign, supranational, local 

authority, and non-U.S. agency bonds 

that have a remaining maturity of 

greater than or equal to one year. The 

Commission previously approved the 

original listing and trading of shares of 

this Fund on NYSE.15

The iShares Lehman Intermediate 

Government/Credit Bond Fund seeks 

investment results that correspond 

generally to the price and yield 

performance, before fees and expenses, 

of the investment-grade credit sector of 

the U.S. bond market and the total U.S. 

Treasury market, as defined by the 

Lehman Brothers Intermediate U.S. 

Government/Credit Index. The Lehman 

Brothers Intermediate U.S. Government/ 

Credit Index measures the performance 

of U.S. dollar-denominated U.S. 

Treasury securities and governmentrelated and investment-grade U.S. 

corporate securities that have a 

remaining maturity of greater than or 

equal to one year and less than ten 

years. The Commission previously 

approved the original listing and trading 

of shares of this Fund on NYSE.16

The iShares Lehman Government/ 

Credit Bond Fund seeks investment 

results that correspond generally to the 

price and yield performance, before fees 

and expenses, of the U.S. government 

and investment-grade U.S. corporate 

securities of the U.S. bond market, as 

defined by the Lehman Brothers U.S. 

Government/Credit Index. The Lehman 

Brothers U.S. Government/Credit Index 

measures the performance of U.S. 

dollar-denominated U.S. Treasury 

securities and government-related and 

investment-grade U.S. corporate 

securities that have a remaining 

maturity of greater than or equal to one 

year. The Commission previously 

approved the original listing and trading 

of shares of this Fund on NYSE.17

The foregoing underlying indexes on 

which the Funds are based are referred 

to herein collectively as the ‘‘Indexes.’’

The exact composition and 

methodologies of each Index are 

described in detail in the filings 

pursuant to which NYSE and Amex 

sought to originally list and trade the 

Shares of the Funds.18

Quotations for and last sale 

information regarding the Fund Shares 

are disseminated through the 

Consolidated Tape System (‘‘CTS’’). On 

each business day, the list of names and 

amount of each security constituting the 

current Deposit Securities 19 and the 

Balancing Amount 20 effective as of the 

previous business day will be made 

available through the National 

Securities Clearing Corporation 

(‘‘NSCC’’). An amount per Share 

representing the sum of the estimated 

Balancing Amount effective through and 

including the previous business day, 

plus the current value of the Deposit 

Securities in U.S. dollars, on a per-Share 

basis (the Intraday Optimized Portfolio 

Value or ‘‘IOPV’’), will be calculated by 

an independent third party, such as 

Bloomberg L.P., every 15 seconds 

during Nasdaq’s regular trading hours 

and disseminated every 15 seconds 

through the CTS. Because NSCC does 

not disseminate information about the 

Portfolio Deposit immediately following 

the end of regular market hours, an 

updated IOPV cannot be calculated 

during Nasdaq’s post-market trading 

session, 4:15 p.m. to 8 p.m. Eastern 

Time (‘‘ET’’). 

Nasdaq states that NYSE and Amex, 

as applicable, disseminate on a daily 

basis a variety of data with respect to 

each Fund by means of the Consolidated 

Tape Association/Consolidated 

Quotation High Speed Lines, including 

information with respect to recent NAV 

for each Fund, shares outstanding, and 

the estimated cash amount and total 

cash amount per Creation Unit 

Aggregation. In addition, the iShares 

Web site (http://www.ishares.com/ 

fund_info), which is publicly accessible 

at no charge, contains the following 

information, on a per-Share basis, for 

each Fund: (1) The prior business day’s 

NAV; (2) the mid-point of the bid-ask 

price and a calculation of the premium 

or discount of such price against such 

NAV; and (3) data in chart format 

displaying the frequency distribution of 

discounts and premiums of the bid-ask 

price against the NAV, within 

appropriate ranges, for each of the four 

previous calendar quarters. 

The value of each Index is calculated 

once each trading day and is available 

from major market data vendors. The 

NAV for each Fund is calculated and 

disseminated daily through a number of 

sources, including the Web sites of the 

original listing exchanges, as applicable, 

the iShares Web site, and CTS. 

Nasdaq states that it will halt trading 

in the Shares of a Fund under the 

conditions specified in Nasdaq Rules 

4120 and 4121. The conditions for a 

trading halt include a regulatory halt by 

the original listing market. UTP trading 

in the Shares will also be governed by 

provisions of Nasdaq Rule 4120 relating 

to temporary interruptions in the 

calculation or wide dissemination of the 

IOPV or the value of the Index.21

Additionally, the Exchange states that it 

may cease trading the Shares if other 

unusual conditions or circumstances 

exist, which, in the opinion of the 

Exchange, make further dealings on the 

Exchange detrimental to the 

maintenance of a fair and orderly 

market. The Exchange represents that it 

would follow any procedures with 

respect to trading halts as set forth in 

Nasdaq Rule 4120(b). 

Nasdaq deems the Shares of the 

Funds to be equity securities, and 

therefore, trading in the Shares will be 

subject to Nasdaq’s existing rules 

governing the trading of equity 

securities. The primary trading hours for 

the Shares on Nasdaq will be 9:30 a.m. 

to 4:15 p.m. ET. The Shares will also be 

traded on Nasdaq in a post-market 

session from 4:15 p.m. to 8 p.m. ET.22

Nasdaq represents that it has in place 

appropriate rules to facilitate 


cprice-sewell on PROD1PC61 with NOTICES
8230 Federal Register / Vol. 72, No. 36 / Friday, February 23, 2007 / Notices 

23Surveillance of all trading on NASD facilities 

operated by Nasdaq is currently conducted by 

NASD. Following Nasdaq’s transition to exchange 

status, NASD will continue to surveil trading, 

pursuant to a regulatory services agreement. Nasdaq 

is responsible for NASD’s performance under this 

regulatory services agreement. 

24 15 U.S.C. 78f(b). 

25 15 U.S.C. 78f(b)(5). 

26 17 CFR 240.12f–5. 

27 In approving this rule change, the Commission 

notes that it has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

28 15 U.S.C. 78f(b)(5). 

29 15 U.S.C. 78l(f). 

30Section 12(a) of the Act, 15 U.S.C. 78l(a), 

generally prohibits a broker-dealer from trading a 

security on a national securities exchange unless 

the security is registered on that exchange pursuant 

to Section 12 of the Act. Section 12(f) of the Act 

excludes from this restriction trading in any 

security to which an exchange ‘‘extends UTP.’’

When an exchange extends UTP to a security, it 

allows its members to trade the security as if it were 

listed and registered on the exchange even though 

it is not so listed and registered. 

31See supra notes 4, 5, 6, and 10. 

32 17 CFR 240.12f–5. 

transactions in the Shares during all 

trading sessions. 

In connection with the trading of the 

Shares, Nasdaq will inform its members 

in an Information Circular of the special 

characteristics and risks associated with 

trading the Shares, as well as the 

requirements of Nasdaq Rule 2310, 

which requires Nasdaq members to 

determine that a particular security is 

suitable for a customer before 

recommending a transaction in it. 

Nasdaq also would require its members 

to deliver a prospectus or product 

description to investors purchasing the 

Shares prior to or concurrently with a 

transaction in the Shares. 

Nasdaq believes that its surveillance 

procedures are adequate to address any 

concerns about the trading of the Shares 

on Nasdaq. Trading of the Shares 

through NASD facilities operated by 

Nasdaq is currently subject to NASD’s 

surveillance procedures for equity 

securities in general and ETFs in 

particular. After Nasdaq begins to 

operate as an exchange with respect to 

securities not listed on Nasdaq, NASD, 

on behalf of Nasdaq, will continue to 

surveil Nasdaq trading, including 

Nasdaq trading of the Shares. Nasdaq’s 

transition to exchange status will not 

result in any change in the surveillance 

process with respect to the Shares.23

2. Statutory Basis 

The proposal is consistent with 

Section 6(b) of the Act 24 in general and 

Section 6(b)(5) of the Act 25 in particular 

in that it is designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to remove 

impediments to, and perfect the 

mechanism of a free and open market, 

and, in general, to protect investors and 

the public interest. In addition, the 

proposal is consistent with Rule 12f–5 

under the Act 26 because Nasdaq deems 

the Shares to be equity securities, thus 

rendering trading in the Shares subject 

to the Exchange’s existing rules 

governing the trading of equity 

securities. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will result in 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purpose of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

The Exchange has neither solicited 

nor received written comments on the 

proposed rule change. 

III. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–NASDAQ–2007–002 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–NASDAQ–2007–002. This 

file number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for inspection and copying in 

the Commission’s Public Reference 

Room. Copies of such filing also will be 

available for inspection and copying at 

the principal offices of Nasdaq. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–NASDAQ–2007–002 and 

should be submitted on or before March 

16, 2007. 

IV. Commission’s Findings and Order 

Granting Accelerated Approval of the 

Proposed Rule Change 

After careful review, the Commission 

finds that the proposed rule change, as 

amended, is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange.27 In 

particular, the Commission finds that 

the proposed rule change is consistent 

with Section 6(b)(5) of the Act,28 which 

requires that an exchange have rules 

designed, among other things, to 

promote just and equitable principles of 

trade, to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and in general to protect 

investors and the public interest. The 

Commission believes that this proposal 

should benefit investors by increasing 

competition among markets that trade 

the Shares. 

In addition, the Commission finds 

that the proposal is consistent with 

Section 12(f) of the Act,29 which permits 

an exchange to trade, pursuant to UTP, 

a security that is listed and registered on 

another exchange.30 The Commission 

notes that it previously approved the 

listing and trading of the Shares on 

NYSE and Amex, as applicable.31 The 

Commission also finds that the proposal 

is consistent with Rule 12f–5 under the 

Act,32 which provides that an exchange 

shall not extend UTP to a security 

unless the exchange has in effect a rule 

or rules providing for transactions in the 

class or type of security to which the 

exchange extends UTP. The Exchange 

has represented that it meets this 

requirement because it deems the 

Shares to be equity securities, thus 

rendering trading in the Shares subject 

to the Exchange’s existing rules 


cprice-sewell on PROD1PC61 with NOTICES
Federal Register / Vol. 72, No. 36 / Friday, February 23, 2007 / Notices 8231 

33 15 U.S.C. 78k–1(a)(1)(C)(iii). 

34 15 U.S.C. 78s(b)(2). 

35 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(ii). 

4 17 CFR 240.19b–4(f)(2). 

5Changes to the proposed rule text are marked to 

the rule text that appears in the electronic Nasdaq 

Manual found at nasdaq.complinet.com/nasdaq/ 

display/index.html. 

governing the trading of equity 

securities. 

The Commission further believes that 

the proposal is consistent with Section 

11A(a)(1)(C)(iii) of the Act,33 which sets 

forth Congress’s finding that it is in the 

public interest and appropriate for the 

protection of investors and the 

maintenance of fair and orderly markets 

to assure the availability to brokers, 

dealers, and investors of information 

with respect to quotations for and 

transactions in securities. Quotations for 

and last sale information regarding the 

Fund Shares are disseminated through 

CTS. Furthermore, an IOPV for each 

Fund, updated to reflect changes in the 

amount of the Portfolio Deposit, on a 

per-Share basis, is calculated and 

published by a third-party service 

provider through CTS on a 15-second 

delayed basis during Nasdaq’s regular 

trading hours. Major market data 

vendors calculate and disseminate once 

each trading day the value of each Index 

and the NAV for each Fund. Amex and 

NYSE, as applicable, disseminate 

information with respect to NAV and 

cash amounts per Creation Unit 

Aggregation, and the iShares Web site 

supplies additional trading data for the 

Shares, both current and historical. If 

the listing market halts trading in the 

Shares, or the IOPV or any Index value 

is not being calculated or disseminated, 

the Exchange would halt trading in the 

Shares. 

The Commission notes that, if the 

Shares should be delisted by the listing 

exchange, the Exchange would no 

longer have authority to trade the Shares 

pursuant to this order. 

In support of this proposal, the 

Exchange has made the following 

representations: 

(1) The Exchange’s surveillance 

procedures are adequate to address any 

concerns associated with the trading of 

the Shares on a UTP basis. 

(2) The Exchange would inform its 

members in an Information Circular of 

the special characteristics and risks 

associated with trading the Shares, 

including suitability recommendation 

requirements. 

(3) The Exchange would require its 

members to deliver a prospectus or 

product description to investors 

purchasing Shares prior to or 

concurrently with a transaction in such 

Shares and will note this prospectus 

delivery requirement in the Information 

Circular. 

This approval order is conditioned on 

the Exchange’s adherence to these 

representations. 

The Commission finds good cause for 

approving this proposal before the 

thirtieth day after the publication of 

notice thereof in the Federal Register. 

As noted above, the Commission 

previously found that the listing and 

trading of the Shares on NYSE and 

Amex, as applicable, is consistent with 

the Act. The Commission presently is 

not aware of any regulatory issue that 

should cause it to revisit that finding or 

would preclude the trading of the 

Shares on the Exchange pursuant to 

UTP. Furthermore, accelerated approval 

of this proposal will facilitate Nasdaq’s 

ability to continue trading certain nonNasdaq-listed ETFs as Nasdaq becomes 

an exchange with respect to nonNasdaq-listed securities, where there 

appears to be no regulatory concerns 

about such trading. Therefore, 

accelerating approval of this proposal 

should benefit investors by creating, 

without undue delay, additional 

competition in the market for such 

Shares. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,34 that the 

proposed rule change (SR–NASDAQ–

2007–002), as modified by Amendment 

No. 1, be, and it hereby is, approved on 

an accelerated basis. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.35

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–3076 Filed 2–22–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55284; File No. SR–

NASDAQ–2007–003] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Modify 

Pricing for Nasdaq Members Using the 

Nasdaq Market Center 

February 13, 2007. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on January 

29, 2007, The NASDAQ Stock Market 

LLC (‘‘Nasdaq’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared substantially by Nasdaq. 

Pursuant to Section 19(b)(3)(A)(ii) of the 

Act 3 and Rule 19b–4(f)(2) 4 thereunder, 

Nasdaq has designated the proposed 

rule change as establishing or changing 

a member due, fee, or other charge, 

which renders the proposed rule change 

effective upon filing with the 

Commission. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Nasdaq proposes to modify the 

pricing for Nasdaq members using the 

Nasdaq Market Center (‘‘Center’’). 

Nasdaq will implement this proposed 

rule change on February 1, 2007. The 

text of the proposed rule change is 

available at Nasdaq, www.nasdaq.com, 

and the Commission’s Public Reference 

Room.5

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

Nasdaq included statements concerning 

the purpose of and basis for the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. Nasdaq has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

This proposed rule change modifies 

the pricing schedule for trading 

securities through the Center. In 

addition to modifying the level of 

certain fees, the filing also adds 

language reflecting the fees to be 

charged for trading non-Nasdaq 

securities through the Center. Nasdaq 

anticipates that such trading will begin 

on February 12, 2007. The fee schedule 

reflects the volume of a member’s use of 

the Center and also the ITS/CAES and 

Inet systems operated by Nasdaq and its 


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